9911796707
TMI Blog1963 (8) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... or purchase of any goods where such sale or purchase took place in the course of inter-State trade or commerce during the period between the 1st day of April, 1951, and the 6th day of September, 1955, shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sale or purchase took place in the course of interState trade or commerce; and all such taxes levied or collected or purporting to have been levied or collected during the aforesaid period shall be deemed always to have been validly levied or collected in accordance with law." There can be no doubt that Central Act 7 of 1956 was intended to validate State laws imposing or authorising the imposition of taxes on the sale or purchase of goods in the course of inter-State trade or commerce. And there is the decision of the Supreme Court in State of Kerala and Others v. Cochin Coal Company Ltd. [1961] 12 S.T.C. 1., to support the conclusion that section 26 of the General Sales Tax Act, 1125, imposes a tax on the sale or purchase of goods in the course of inter-State trade or commerce, and that the taxation of such sales during the period between 1st April, 1951, and 6th September, 1955, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of goods shall not be imposed under this Act,- (i) where such sale or purchase takes place outside the State; or (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territory of India; (b) a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter-State trade or commerce." 5.. In T. R. C. Nos. 1, 2 and 3 of 1961*, this Court held that inter-State sales after 31st March, 1951, were not taxable. The decision was based on section 26(b) of the General Sales Tax Act, 1125, which as amended by Act 12 of 1957-and extracted above-said that notwithstanding anything contained in the General Sales Tax Act, 1125, "a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter-State trade or commerce." 6.. The Constitution (Sixth Amendment) Act, 1956, inserted Entry 92-A (Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of interState trade o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adequate but that the Act is incompetent, that the State Legislature had no power to deal with the subject after the Constitution (Sixth Amendment) Act, 1956. We are in agreement with this submission. 9. The validity of an enactment should be tested on the basis of the legislative power obtaining on the date on which it comes into being. A piece of legislation may be prospective or retrospective or both; but in every case the legislative competence is something that must exist when the legislation is passed and not at any other time. Ancient competence which had disappeared or future competence not yet in existence are both of no avail. The only question is: Was the Legislature competent to pass the legislation, whether prospective, retrospective or both, on the date it was engrossed in the Statute book of the State? 10.. As stated by Willoughby: "The validity of a statute is to be tested by the constitutional power of a Legislature at the time of its enactment by that Legislature, and, if thus tested it is beyond the legislative power, it is not rendered valid, without re-enactment, if later, by constitutional amendment, the necessary legislative power is granted." This is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under Article 286(2) of the Constitution. That Order said: "Any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of the Constitution of India shall, until the thirty-first day of March 1951, continue to be levied notwithstanding that the imposition of such tax is contrary to the provisions of clause (2) of Article 286 of the said Constitution." 3.. All the sales with which we are concerned took place subsequent to 31st March, 1951. It is impossible to understand how such sales can attract the sales tax under the General Sales Tax Act, 1125, in the light of the assumption made by the department and the Appellate Tribunal to the effect that the sales were sales in the course of inter-State trade or commerce. 4.. After the decision of the Supreme Court in the Bengal Immunity Company case[1955] 6 S.T.C. 446. , the President promulgated Ordinance 3 of 1956 on 30th January, 1956. That Ordinance was subsequently replaced by the Sales Tax Laws Validation Act, 1956. It came into force on 21st 5.. These enactments were intended to validate the State laws imposing or authorising the imposition of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be put on it is that while the prohibition is intended to prevent taxation of outside sales on the basis of the nexus doctrine, the Explanation is intended to authorise taxation of sales falling within its purview, subject of course to the other provisions of the Constitution, such as Article 286(2)." The significant words are "subject of course to the other provisions the Constitution, such as Article 286(2)." 9.. Article 286(2) of the Constitution (omitting the proviso thereto) provided: "Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce." The State loses these cases not for any lack of a parliamentary provision authorising the imposition of the tax but for the reason that out of quiescence or carelessness it has not chosen to alter the date specified in section 26 of the General Sales Tax Act, 1125, from 31st March, 1951, to 6th September, 1955. 10.. In the light of what is stated above these petitions have to be allowed and we do so, Advocate's fee Rs. 300 for all the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
